Correlation Between Xtrackers LevDAX and Materialise

Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Materialise at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xtrackers LevDAX and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Xtrackers LevDAX and Materialise NV, you can compare the effects of market volatilities on Xtrackers LevDAX and Materialise and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xtrackers LevDAX with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Materialise.

Diversification Opportunities for Xtrackers LevDAX and Materialise

0.77

Correlation Coefficient

Xtrackers LevDAX  Materialise

Poor diversification

The 3 months correlation between Xtrackers and Materialise is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Xtrackers LevDAX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xtrackers LevDAX are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Xtrackers LevDAX i.e., Xtrackers LevDAX and Materialise go up and down completely randomly.

Pair Corralation between Xtrackers LevDAX and Materialise

Assuming the 90 days trading horizon Xtrackers LevDAX is expected to generate 1.32 times less return on investment than Materialise. But when comparing it to its historical volatility, Xtrackers LevDAX is 1.54 times less risky than Materialise. It trades about 0.18 of its potential returns per unit of risk. Materialise NV is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  404.00  in Materialise NV on April 24, 2025 and sell it today you would earn a total of  101.00  from holding Materialise NV or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Xtrackers LevDAX  vs.  Materialise NV

Xtrackers LevDAX

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers LevDAX are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Xtrackers LevDAX reported solid returns over the last few months and may actually be approaching a breakup point.

Materialise NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Materialise NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Materialise unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xtrackers LevDAX and Materialise

The main advantage of trading using opposite Xtrackers LevDAX and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Materialise can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Materialise will offset losses from the drop in Materialise's long position.

The idea behind Xtrackers LevDAX and Materialise NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..